This blog recently discussed a few of the basic bankruptcy myths, and in keeping with the idea that bankruptcy is not a huge mistake or negative action; this blog will continue debunking the many myths about bankruptcy. Here are a few more myths worth discussing.
If you file for bankruptcy, everyone will know about it.
Wrong. Only your creditors, those with a reason to check your credit report, your attorney, the court, your family, and those you share the information with will know. Unlike the bankruptcies of the rich and famous, the average person’s filing is not a matter of media or public scrutiny.
Bankruptcy leads to divorce.
No. If you wind up divorced, it is probably because the marriage was already in trouble due to other problems compounded by financial problems. If you survive financial issues and make it to bankruptcy, odds are the bankruptcy will help your marriage rather than hurt it.
There is a minimum amount of debt required before you can file bankruptcy.
No. You can file bankruptcy with as little as $500. The need to file bankruptcy is based on your income and ability to pay in relation to your debt rather you have $500 in debt or $10,000 in debt.
You can only file bankruptcy once in a lifetime.
Not true. Y0ou cannot abuse the system by filing over and over to avoid paying your bills, but you can file Chapter 7 once every 8 years if need be. Chapter 13 has no restrictions.
Many people feel as if they have failed and are all alone when facing impending bankruptcy. While this is not the most ideal situation, bankruptcy is the opportunity for financial relief and a fresh start. No one should ever feel alone, as millions of Americans have or will file bankruptcy at some point during their lives. It is important to remember that a lack of financial responsibility, while one cause, is not the most common cause of bankruptcy. Most people wind 7up in over their heads due to unavoidable circum stances such as long-term unemployment, accidents and illnesses, death, loss or lack of profit (in the case of small businesses) and more. Furthermore, your income or net worth often has nothing to do with the need to file bankruptcy. Even the wealthy often find themselves in need of a new start and the opportunity to force relentless debt collectors to cease. Many famous people have found themselves in bankruptcy court, and many of these people have continued to experience success on one level or another, due in part to bankruptcy. Here are just a few examples:
- Donald Trump
- MC Hammer
- Toni Braxton
- John Wayne
- President Harry S. Truman
- Larry King
- Willie Nelson
- Tom Petty
- Gary Burghoff (of M*A*S*H fame)
- Burt Reynolds
- Mike Tyson
- Francis Ford Coppola
- Walt Disney
- J.C. Penney
- Charles Schwab
- Conrad Hilton
- Henry Ford
All of these successful people who have filed for bankruptcy should give you some hope. And this is only a small selection of notables who have encountered financial struggles. You are not alone. Many people face bankruptcy, and a qualified bankruptcy attorney is the key to success in your case.